Nokia Profit Slips As Phone Prices Decline

LONDON (Dow Jones) - Nokia Corp. on Thursday said fourth-quarter profit slipped 1% due to the increasing popularity of low-end phones and as take-up of telecom infrastructure equipment slowed.

Nokia said fourth-quarter net income fell to 1.07 billion euros, or 0.25 euros a share, from a revised 1.08 billion euros, or 0.24 euros a share, with sales up 9% to 10.33 billion euros.

Analysts polled by Thomson First Call were expecting earnings of 1.05 billion euros, or 0.24 euros a share, on revenue of 9.97 billion euros.

Nokia shares slipped over 3% in Helsinki.

The world's largest phone maker said it sold 27% more devices than a year ago to 84 million units, boosting its market share by one percentage point from the third quarter to 34%.

But average selling prices for phones fell to 99 euros from 102 euros in the third quarter, and mobile phone operating margins slipped to 17.1% from 18.9% a year ago.

Nokia, which competes against Motorola, had anticipated a decline in average selling prices, driven by a mix shift in volumes to markets where low-end volumes predominate.

At its networks division, which makes infrastructure equipment for mobile phone operators, its operating profit fell 12% to 268 million euros on a revenue decline of 4% to 1.95 billion euros. Nokia said there was exceptionally high sales in the year-ago quarter.

Looking ahead, first-quarter market share in devices should be flat to slightly up sequentially, and average selling prices to be flat to slightly down on a regional mix shift.

Its networks business sales should fall sequentially on a seasonal decline but rise from a year ago.

(END) Dow Jones Newswires "

Posted to the site on 26th January 2006